Government sets agenda for freeing up finance
The Government has launched a consultation on how to free up access to finance for small businesses.
The paper, "Financing a Private Sector Recovery", explores every major finance option, including more use of equity and encouraging venture capital and "business angels" to invest in a wider range of businesses as well as a responsible return to securitisation.
It sets out options for the banking industry, such as an insolvency moratorium on companies restructuring their debt, increasing transparency in bank loan applications and fostering competition between banks and finance institutions.
The paper also addresses the success of existing Government schemes, such as the Enterprise Finance Guarantee, and whether they should be improved or extended.
"If we don't anticipate and tackle finance barriers now we could face a big problem in the future," said business secretary Vince Cable. "Left unchallenged, a lack of accessible finance for businesses could prevent the recovery accelerating.
"I've heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That's why this green paper is so important as we look to help viable firms get the money they need."
Chancellor of the Exchequer George Osborne added: "Accessing finance continues to be a challenge for many British businesses.
"As the economy recovers, it is crucial to ensure that the supply of finance supports rather than constrains demand and business confidence. If businesses are to play their part in promoting economic recovery it is important that they are able to access a diverse range of finance choices in a stable macroeconomic environment."
